KUALA LUMPUR: The Government will gradually reduce its dependence on oil revenue from Petroliam Nasional Bhd (Petronas), according to Treasury secretary-general Datuk Dr Mohd Irwan Serigar Abdullah.
“We have had a few discussions and aim to rely less on dividends from Petronas,” he said at a post-Budget 2013 dialogue organised by the Malaysian Economic Association.
The national oil corporation has sought to pay 30% of its profits as dividends instead of the current fixed sum of RM30bil a year from next year. Petronas accounts for about half of the Government's revenue.
Although the Government has yet to give its consent, Petronas CEO Tan Sri Shamsul Azhar Abbas had said: “The understanding is there. There's nothing in black and white.”
Under Budget 2013 unveiled, Petronas is expected to contribute RM27bil to the national coffers.
Asked about the implementation of the goods and services tax (GST), which industry observers had predicted would be realised only after the general election, Irwan said “it will come”.
“All the elements are in place the legal documentation, technology is ready. It is just a matter of timing,” he said.
On the Finance Ministry's initiatives to ensure the country's finances remained sound, he said plans such as a fiscal sustainability committee and public expenditure review were in the offing.
Irwan, who was appointed to the top post last month, also pointed out that the Government would keep below its self-imposed limit of public debt to gross domestic product of 55% “by hook or by crook”.
Meanwhile, panellist Stewart Forbes, who is executive director of the Malaysian International Chamber of Commerce, told participants that the GST was crucial as it would enable the Government to eventually lower corporate taxes, the trade body's main concern.
“It is not the GST itself that the association is interested in but that without a broad-based tax, we will not be able to pursue lower corporate or personal tax.
“The non-tax incentives may add up, but at the end of the day, businesses look at the first line (corporate tax),” he said.
He added that the Government should not spoon feed small and medium enterprises (SME) with continued easy access to funding but should address instead the more pressing issue of capacity.
“I am in favour of making sure there is adequate financing for SMEs.
“But I am more concerned about raising their capability to the extent they can put forward the proper proposals to banks (to obtain their own capital) rather than go on with handouts and assume that just because they are SMEs, someone should put money in their hands,” he said.